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S&P affirms Medical Properties Trust ratings

S&P Global Ratings affirmed its ratings on net-lease healthcare real estate investment trust Medical Properties Trust Inc., with a negative outlook.

Specifically, the rating agency affirmed the REIT and its operating partnership's issuer credit ratings at BB+ and the issue-level rating on the company's senior unsecured notes at BBB-.

S&P said the affirmation and negative outlook take into account the REIT's increased exposure to its top tenant, Steward Health Care System LLC, which represented 36.6% of the company's revenues as of Sept. 30.

Despite Medical Properties' significant tenant concentration risk to Steward, and barring any additional bankruptcies or tenant distress within its portfolio, the rating agency expects that the REIT will continue to generate relatively stable and positive cash flows over the foreseeable future, due mainly to the company's long-term, mostly triple-net leases.

S&P expects Medical Properties' growth to accelerate over the next 12 months, as the company has a pipeline of approximately $5 billion, with none of the growth involving Steward. This should drive the tenant's concentration to the low-30% range, the rating agency added.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.